Friday, October 07, 2005

Fri - UK's 2nd largest telco C&W slumps

Cable & Wireless lost almost a fifth of its value today after the UK telecoms company forecast a 6% drop in first-half revenue at its core UK business, which the market has interpreted as a profit warning.

Britain's 2nd largest fixed-line telecoms company said the performance was in line with its expectations, but noted a worsening shift in its revenue mix from retail to carrier services, with weaker margins in the retail business.

The company, which last month announced the acquisition of smaller UK corporate telecoms rival Energis for up to 674 million pounds, said it had seen some loss of momentum in sales planning since the announcement of the Energis deal.

It just goes to prove that being a predominantly fixed line telecoms operator today is not a great place to be - and it will only get worse as prices falls and competition accellerate.